China is implementing a "prudent and neutral" monetary policy, and there is no need to over-interpret each open market operation and price changes in those operations, the country's central bank governor said Friday.
"We use the monetary policy tools we possess to guide market prices and expectations," Zhou Xiaochuan, governor of the People's Bank of China (PBOC), said at a press conference on the sidelines of the annual parliamentary session.[Special coverage]
Too much liquidity will be very harmful for the economy as it may lead to runaway asset prices, Zhou said.
"If the prudent monetary policy will incline a bit more to neutrality, it will be conducive to the country's supply-side structural reform," Zhou added.
